No Charts Today (updated with a chart!)

258
Wed, Dec 28, 2011 - 10:20am

Because it's all just nonsense. The euro just dropped for no real reason. The incumbent rise in the dollar caused the metals to take the elevator down about 5 floors. Silver has broken through 28 and looks now to be headed toward 26. Maybe by next week we can begin to assess the damage The Cartel is inflicting. Until then, all we can do is watch.

Here's your euro headline, from ZH:

https://www.zerohedge.com/news/eur-plunges-thin-market-below-13000

I found this next article on Harvey's site last night. It was also highlighted on ZH yesterday. You absolutely must take time to read it today if you haven't already. It's a challenging read in that there's a lot of economic stuff that, if you're not patient with it, can glaze you over real fast. My advice is: be patient with it. Take your time and read it carefully.

https://www.zerohedge.com/news/why-ecbs-ltro-wont-stop-collateral-contagion

Just a few more words about OI and the gradual demise of the Comex. First, another link. This one is from JS Kim. He covers many of the things we began discussing here about three weeks ago. It's a good summary, though, and worthy of your time:

https://www.zerohedge.com/contributed/did-bankers-deliberately-crash-mf-global-crash-gold-and-silver-prices-0

As we speculated earlier this month, total OI in the metals continues to decline. Gold looks like it may soon fall under 400,000 contracts. Again, what I believe we are seeing is a trend of investors and traders simply walking away from the Comex. After MFGRAP, why would anyone in their right mind buy and hold gold and/or silver through that system? The drop in OI will be gradual but over time, as participation wanes, the Comex will simply become less and less significant in setting the physical price of the PMs.

We all have high hopes that PAGE will accelerate this demise. News yesterday caused great concern that the opening of the PAGE may be delayed or canceled.

https://www.bullionstreet.com/news/chinas-pan-asian-gold-exchange-in-trouble/683

I've tried to get some additional information on this but I'm not making much progress. It seems to me that this is a crackdown, by the Chinese government, on non-governmental exchanges and PAGE is, of course, a government-sponsored entity. Let's hope that all remains on track for a Q1 opening. I will, of course, pass along any additional information that I am able to gather.

As I close, gold is at 1575 and silver is at 27.67. Yikes! I fear that there is more of this to come as The Cartel is clearly in charge this week. There simply aren't enough buyers to counter all of the Cartel selling pressure and, once stops get triggered below previous lows, prices can fall pretty fast. Silver made a low last January around 26.50. That would seem to be where it's headed now. I'm still hoping that 1550-1560 will hold as a bottom for gold. We'll see.

Hang in there. Keep the faith. TF

12:30 EST UPDATE:

OK, I lied. I can't help myself. Here's a chart. Actually, it's a repost of a chart from last week.

What I was trying to demonstrate here was that history shows us how gold responds when it hits the main trendline. It has never sharply rebounded. Often, as denoted by the arrows, it skips along the line for 2-4 weeks before moving higher and away from the line. We are seeing the same thing play out today.

Of course this comes with a caveat. The MFGRAP may be changing the rules on this thing. IF gold drops convincingly through 1550 and heads toward 1500, all bets are off. IF, however, this primary trendline continues to support gold (as I think it will), then gold should stop somewhere between 1550 and 1560 before finally rebounding sometime in the next 2 weeks.

Obviously, we are at a critical moment in determining the future trend of paper gold. Watch things closely. TF

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  258 Comments

Tabberto
Dec 28, 2011 - 1:08pm

Sam777 - its very very good

I will take your comments at face value and just say the following:

The real 'pros' make money on both sides of the trade, so don't be too taken with the bravado of your trader mate - in the financial services industry more than anywhere, an anti-goldbug will take great pleasure in rubbing your nose in it.

Your comment about not listening to ZH, Keiser, Turdville etc is however utterly idiotic whatever may have happened price-wise this year. These websites and sources of knowledge/information are the keys to opening TPTB's Pandora's Box - crucial even to creating an incredible new reality once the rats have eaten each other in the sack of their own making. We ARE outsmarting TPTB by taking delivery of physical metals and although YES you could still buy physical about 4 or 5% above today's crazy lows in the local bullion dealer, the big boys increasingly cannot secure tonnage in the physical market with any ease at all. That tightness in the wholesale market is the sign we have been looking for, the CEO of Anglogold stated recently that big buyers are falling over themselves trying to secure future production direct from mining companies now. This trend once started is inexorable. This is very, very good for a real tectonic shift in how Precious Metals are 'traded' and bought and sold. God forbid, maybe they will even revert to the mean and return to a 1:1 coverage system!

MFGlobal as ghastly as it was showed the guts of the commodities 'trading' environment to the world and the sight was very, very ugly. This is very, very good for us holders of physical and very, very bad for the overall state of the remaining global financial architecture. The price you see is 'an illusion, albeit a persistent one' (nod to Einstein for that quote) as this game of musical chairs in Gold and Silver is down to the last few chairs and soon enough we will be over the classic 'wall of worry' encountered in all mega Bull markets. Price Discovery awaits in 2012, guaranteed....and my suggestion to you is to take a deep breath and realise who your friends are.

Mudsharkbytes
Dec 28, 2011 - 1:11pm

Boo…Hoo…Hoo…

…I don't want to piss anybody off, but it sure seems a lot of crybabies have surfaced today.

I'm as upset and demoralized as the next guy with todays action, mostly because I managed to persuade my son to invest most of his hard earned savings into physical silver this past April 30! I learned my lesson there. Since then I have NEVER recommended buying precious metals to anybody even though I still believe in the fundamentals (I bought in early enough that I am still up, though the percentage keeps dwindling).

However, when I read the comment that silver was going to go down to $18 and then languish there for years, I thought, "You've got to be kidding".

I hope these words don't come back to haunt me, but I can't imagine in my wildest dreams such a scenario playing out, what with above ground supplies in silver being what they are. Logic dictates that long before silver hits $18 there will simply be none available to purchase at anywhere NEAR that price.

The only way I could see such a thing happening would be if everybody interested just said 'fuck it', sold all their silver at a loss, and then toddled off into the sunset never to return.

Ain't gonna happen.

Jasper
Dec 28, 2011 - 1:12pm

On Paradox and Con games.

The objective of a con game is to manage perspective. Its job is to create an illusion, so that something fictitious appears real. The con man's function is to maintain illusion so that confidence is maintained in a perspective of reality that is in fact a lie.

Strategists throughout history, military and otherwise have employed the tools of “deception” in order to achieve victory. I suppose one of the most amazing examples of paradox comes from the season we are currently celebrating. A king was born a child. Later, His apparent defeat on the cross was in fact a victory. What a strange way to win. This apparent deception, surprised and fooled many. The Jews for whom He came, did not receive Him, to their own destruction in AD 70.

I don’t enjoy the current beat down in gold and silver. But I know that “just weights and measures” will prevail over paper facades. The illusion being perpetrated on the world is that financial markets are sound and that gold and silver are worthless relics and are in decline.

Do not be conned and do not throw in the towel! The night is darkest just before the dawn. Faith is the assurance of things hoped for and the conviction of things not seen. I am convinced that the financial paper game will be fully exposed for the confidence game that it is. I am content that in due time, gold and silver will regain their pre-eminence, and the current illusion will collapse.

Today I buy a little more silver.

question
Dec 28, 2011 - 1:17pm

@Halo; Glad, Sad, Mad.

LOL with heartfelt sympathy

Thanks for that

@rjsand; "Whereas the truth is that the State in which the rulers are most reluctant to govern is always the best and most quietly governed.....", Plato sounds like he's quoting from Lao Tsu's Book of the Tao.

Aint it the truth

Patrancus
Dec 28, 2011 - 1:19pm

Timing the market

Timing the market? lots of attempts trying over the past 25 years or so, though somehow these days it has become easier to run the clock in your favor. If you are sitting large in surplus fiat get ready to go physical soon, prices have not been better in the past year to scoop up a decent pile of metal, this paperloving cartel of elite may be in the last gasps of a dying beast. stack & stack and don't look back

York Rite
Dec 28, 2011 - 1:21pm

The anonymous London bullion trader

Must be due for an appearance at KWN telling us of tightness in the market and massive physical buyers are waiting for, well, we'll guess, a gold price of $1480. It was $1595 the last time he showed up. James Turk informed his fans (if he has any left) yesterday to pay close attention to what the trader says. I have no idea why other than to discern that another attack is imminent. Will Santa post a pic of himself snoozing in a chair again after his (and Kenny's) previously impregnable $1584 was taken to the woodshed today for the umpteenth time? He's bemused by why people are so angry. He spent the first three weeks of November creating the false impression that gold was readying for an assault on $2000 and has predictably developed selective amnesia about those entries ever since rather than acknowledge his part in causing so much frustration.

Missiondweller
Dec 28, 2011 - 1:22pm

Killing gold enthusiasm

Turd said: "if its at all possible for The Cartel to take gold down over the next three days and close it below its 12/31/10 close, they'll do it."

I have been expecting this since a decade of gold gains and strongly outperforming stocks is not what the Fed wants joe six pack to be reading about. If it beats stocks again you may be seeing front page stories on Money magazine or Forbes.

Imagine a ten year version of this chart comparing S&P returns to Gold:

https://finance.yahoo.com/echarts?s=GLD+Interactive#symbol=gld;range=my;...^gspc;indicator=volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=;

Couldn't have that as the sheep might start waking up and buying PM's. Better to use the low volume end of year to push it as low as possible. A negative yearly return would kill the above story and allow CNBC to crowe once again that the "bubble" in PM's has burst.

Economical Disaster
Dec 28, 2011 - 1:36pm

Is it Possible?

Nobody here knows anything, we can all write about what should happen, what should have happened and what could happen. It means NOTHING, because we just don't know ANYTHING. Is this the new norm, when everything collapses including the dollar... gold and silver goes with it and we are all PAUPERS? Is it possible?

silverwood
Dec 28, 2011 - 1:38pm

Oh! the pain.

So I see many crying the blues for buying silver and gold at higher prices. I believe the term is called, bag holders. So to all of you bag holders at higher PM prices, you want to know what is infinitely more painful position to be in? How about selling all your silver back in the 90's for $3.90 an ounce. I was talking to someone who had a degree in geology and we got on the subject of silver. He had made an investment in physical silver ( I didn't ask how much)and was shaken out at $3.90!!!! Now that's what I call living perpetually in the house of pain.

Dr G
Dec 28, 2011 - 1:39pm

Many of you are bi-polar.

Many of you are bi-polar. Seriously. You are also foolish for believing that anybody can call this market down to the dollar. Even then, some would like it to be called down to the exact penny. Get a grip.

Santa can post what he wants. He knows what he's doing. He says gold will bounce off 1590 and then it goes to 1560. What is the problem with that? How does that affect you? If you were waiting for 1650 so you could pay off your mortgage then you get to wait longer. If you were waiting for 1650 so you could sell an oz and make a mortgage payment then you need a lesson in personal finance. If you are stacking metal then it doesn't affect you at all, other than you can think about lowering your costs by buying more.

More to the point: how does gold dropping $30 today change the fact that it could be readying an assault on $2,000? Answer: it doesn't.

I've never seen so many windy stackers/traders in my life. Whatever way the wind blows, eh?

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